Ending and Renewing Commercial Leases / Business tenancies – Part I

Ending and Renewing Commercial Leases / Business tenancies – Part I

In this article we look at the Law that applies where the Landlord or the Tenant wants to either end or renew the Lease.

The Landlord and Tenant Act 1954

Part 2 of the Landlord and Tenant Act 1954 (the 1954 Act) provides a framework for the renewal and termination of business tenancies in England and Wales.

While the main features of the 1954 Act remain unchanged, the Regulatory Reform (Business Tenancies) (England and Wales) Order 2003 has modernised the workings of the Act, removing certain anomalies and making the renewal and termination of business tenancies quicker, easier, fairer and cheaper.

The detailed changes to the working of the 1954 Act took effect from 1 June 2004.

A brief overview

The 1954 Act broadly gives business tenants security of tenure – a statutory right to remain in their business premises when their lease ends and to seek a new tenancy. However, the landlord may oppose renewal on limited specific grounds. If the landlord and tenant cannot agree on a new lease, the tenant can apply to the court, which will fix the terms of the new tenancy. These will reflect the terms of the existing tenancy, but the new rent will reflect the current open market rent for similar premises.

There is also provision for interim rent, which the court can order to be payable pending determination of the new rent.

Ending the Lease

The landlord may oppose renewal on limited, specific grounds set out in the 1954 Act.

Among these are grounds where the tenant has failed to pay the rent or meet other lease obligations, but the landlord may also seek possession on certain specific grounds where the tenant is not “at fault”.

In Part II, you will find a list of the Grounds in more detail.

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